Ombudsman suspends Pichay over 'misuse' of LWUA funds

The Office of the Ombudsman has suspended Local Water Utilities Administration (LWUA) board of trustees chairperson Prospero Pichay for allegedly misusing the funds of the agency in the acquisition of a troubled thrift bank in 2008. In a 10-page order, acting Ombudsman Orlando Casimiro placed Pichay under a six-month preventive suspension without pay for his alleged unlawful investment of P780 million in LWUA funds in the cash-strapped, Laguna-based thrift bank Express Savings Bank Inc. (EXSBI). "(It is) imperative on the part of the Office of the Ombudsman to immediately place him under preventive suspension, as the need for precautionary measures against possible abuse of the prerogatives of his office may escalate under the circumstances," he said in the order.
Casimiro said the suspension came after several LWUA officials filed the complaint against Pichay and other trustees. He said the LWUA officials also alleged that the trustees unlawfully authorized a payment of P4 million to increase the authorized capital stock of ESBI. The acting Ombudsman added that the complainants said the respondents violated BSP Circular No. 309 when they failed to secure the approval of the Monetary Board on the sale or transfer of shares before disbursing P480M in LWUA funds. With the move, the LWUA gained control of the 20 percent of EXSBI’s voting stock. However, unlike Pichay, the other respondents were not placed under preventive suspension because there was supposedly no proof of their participation in the resolutions approving the acquisition. Pichay, in a counter-affidavit submitted to the Department of Justice (DOJ), said there was no irregularity in the acquisition of shares of EXSBI. LWUA, a government-owned and -controlled corporation, is a specialized lending institution for the promotion, development, and financing of local water utilities, and a depository of the reserves for capital improvement of local water utilities. - VVP, GMA News